ORDER :- By this judgment the aforesaid four appeals are being disposed of since they arise out of the same accident and involve common questions of law.

2. On 17-2-2001 at about 11.00 p.m. an accident took place between jeep No. HP-12-1711 and truck No. HIS 9211. A number of claim petitions were filed and the learned Tribunal held that the accident took place due to rash and negligent driving of Jagtu, driver of the truck which was owned by Bahadur Singh. Compensation was awarded and the Insurance Company was held liable to pay compensation.

3. The dispute raised by the Insurance Company is that on the date of accident the truck was not insured with it. The admitted facts are that a cover note was issued by the appellant-Insurance Company in favour of Bahadur Singh, owner of the truck No. HIS 9211 whereby truck was insured w.e.f. 21-4-2000 to 20-4-2001. The payment of premium was made by Bahadur Singh, owner of the truck, vide cheque No. 989130, dated 19-4-2000, Ex.PW-3/A. Consequent to the issuance of the cover note, the Insurance Company also issued a policy of insurance, Ex. RW-3/B. This cover note was issued on the consideration of the cheque. The cheque was sent for encashment by the Insurance Company and was dishonoured vide letter Ex.RW-3/C, dated 9th May, 2000. Immediately thereafter on 9-5-2000 the Insurance Company sent a notice Ex.RW-3/D to Bahadur Singh, owner of the truck that the cheque has been dishonoured and, therefore, the policy stands cancelled and the Insurance Company is not at risk. The letter was sent by registered AD post and the Insurance Company has proved on record extract of the dispatch register (RW-3/E) which shows that registered AD letter was sent to Bahadur Singh on 24-5-2000 and on the same date copy of the said letter was sent by ordinary post to the Registration and Licensing Authority, Nalagarh. The stand of the owner of the truck is that the letter was never received by him and he was not aware that it stood cancelled.

4. Learned counsel for the parties have referred to various judgments.

5. In United India Insurance Co. Ltd. v. Ayeb Mohammed and others, 1991 ACJ 650, a two-Judge Bench of the Apex Court held that once the cheque was dishonoured and in absence of payment the cover note became ineffective. It was further held that since the fact that cheque had bounced was a matter within the knowledge of the insured, no special notice would be required to be issued to the insured.

6. This point again came up for consideration before the Apex Court in Oriental Insurance Co. Ltd. v. Inderjit Kaur and others, (1998) 1 SCC 371 : (AIR 1998 SC 588). In this case the premium for the policy was paid by cheque. The policy was issued on 30-11-1989. A letter was sent by the Insurance Company to the insured on 23-1-1990 informing him that the cheque had been dishonoured and that the Company was not at risk. The premium was paid in cash on 2-5-1990. In the meantime on 19-4-1990 the accident took place. A three-Judge Bench of the Apex Court considered the provisions of Section 64-VB of the Insurance Act as well as Sections 147 and 149 of the Motor Vehicles Act. The Apex Court held that the observations in the case of United India Insurance Co. Ltd. v. Ayeb Mohammed and others (supra) did not lay down good law. The Court held as follows (Paras 7, 8 and 10 of AIR) :

"9. We have, therefore, this position. Despite the bar created by Section 64-VB of the Insurance Act, the appellant, an authorized insurer, issued a policy of insurance to cover the bus without receiving the premium therefor. By reason of the provisions of Sections 147 (5) and 149 (1) of the Motor Vehicles Act, the appellant became liable to indemnify third parties in respect of the liability which that policy covered and to satisfy awards of compensation in respect thereof notwithstanding its entitlement (upon which we do not express any opinion) to avoid or cancel the policy for the reason that the cheque issued in payment of the premium thereon

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